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Arbitration Offers Look at MLB in Recession

Since the end of the season, there's been a delicate balancing act in free agency; teams posture about offering lucrative contracts, then hesitate before making them official, or inking players to the aforementioned offers (with the notable exception of Ryan Dempster). To a large degree, the rumor-mongering and financial bragadoccio can be chalked up to typical free-agent market pressures. Teams bid against each other in hypotheticals, driving up the cost for potential opponents to make organizational improvements. That's business.

But this year there's a different component involved. With recession now officially upon us (it has been since last December, in case you hadn't noticed), teams actually are holding the purse strings a bit tighter. Need proof? Just check out the final decisions on whether or not to offer players arbitration.

Earlier today, we noted six notable omissions from the arbitration record, guys who in past years would have been shoo-ins to get an offer: Bobby Abreu, Pat Burrell, Adam Dunn, Braden Looper, Jamie Moyer and Kerry Wood. All of those guys are guaranteed arbitration cases in 2006 and 2007 and, subsequently, are probably earning their former teams a pair of draft picks when they sign somewhere else.

So what changed? That's easy: the market did. The only possible reason for the Yankees not offering Abreu salary arbitration was a fear that he would accept, putting them on the hook for an estimated $17.5 million next year, a sum that New York would have to eat a substantial part of if they then tried to move him somewhere else (by accepting arbitration, Abreu would have forfeitted his no-trade rights). Now, ESPN's Buster Olney is reporting that Abreu will be lucky to find a suitor with $8 million targeted for Abreu. That's a stunning drop off for any outfielder with his resume.

It's not just the Abreu decision, either. Wood would have been a Cubs arbitration afterthought, but the team is petrified he'd accept, forcing them to commit up to $12 million next year to a guy they were committed to dropping as a way to free up payroll for the starting rotation and a left handed bat. Burrell wasn't a shock because of his relationship with the Philadelphia front office -- his icy relationship with Phillies management over the past year+ is well documented -- but he was a shock since he's all but assured to sign somewhere else. By not offering Pat the Bat arbitration, Philadelphia essentially just took two high round draft picks out of its coffers because it was worried about the extreme off chance that Burrell wouldn't get any other offers. To me, the Adam Dunn case seems to flesh out a lot like the Wood situation. Dunn will get a big sum in arbitration, a contract which will become almost untradeable, and Arizona was afraid it would have to pony-up the cash, even with Randy Johnson coming off its books.

That makes the most mystifying cases Jamie Moyer and Braden Looper. I'm not even going to try and understand why Philadelphia didn't offer Moyer arbitration. Sure, he might get a slight financial edge from a mediated hearing, but he might lose it, too, based largely on his age and the decreasing marginal return on aging pitchers. Philadelphia surely figures that it can sign Moyer back at a discount because he won't want to leave Pennsylvania. But not offering arbitration might be one of the few "slap to the face" moves that could make him think about taking his show back on the road. As for Looper, St. Louis declining his arbitration is beyond puzzling. For the sum Looper was likely to get he would have made a remarkably affordable middle-of-the rotation starter, all in a place he'd warmed to and where he'd help resurrect his career as a starter. Clearly, the Cardinals are gambling that the market will take such a severe dip that they can sign him on the cheap.

And that's where all this begins: the market really may be in free-fall. Sure, guys like CC Sabathia and Mark Teixeira are going to get mega-buck deals, but some of the other free agents who were counting on cashing in this offseason may be in for a rude awakening. As natbisquit pointed out, guys like Orlando Hudson, who reportedly is being targeted by a handful of teams, might just accept arbitration if early offers come in lower than they were expecting. After all, in a way arbitration is a get out of jail free card; it's a one year deal at a mediated salary. Take the arb deal, play a year, come back out and try the market in a different financial climate.

But at the end of all this analysis, one thing remains most striking: the Yankees turned down arbitration on a key part of their equation in recent years, a guy they could have used back in the fold. I know they say that a recession is when you're neighbor loses his/her house and a depression is when you lose yours. Well, in baseball, a recession is when the Yankees don't offer arbitration to a primo outfielder. A depression is when he can't get a decent contract offer from anyone else on the free market.

That's all you really need to know, but it's always nice to hear it from official sources, right? Well, here's an AL GM talking to Olney anonymously:

"Anybody who thinks the economy isn't affecting baseball isn't paying attention."

Amen, brother. Amen. Now everyone sit back and enjoy their holiday gingerbread and cocoa. We're in for a long slog this free agent season.

By Cameron Smith  |  December 2, 2008; 2:30 PM ET
Categories:  Cardinals , Cubs , Diamondbacks , Phillies , Yankees  
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Abreu at $8 million would be too tempting for Billy Beane given the shape of his outfield. Perhaps a Crosby to the Os deal a good complement to clear salary.

Posted by: jca-CrystalCity | December 2, 2008 10:02 PM | Report abuse

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